 Standard cost centers are units of production where inputs (materials, labor, machine hours) are specified and outputs can be measured in financial terms . The difference between actual cost and standard cost is called variance. (Carter, et al, 1997) Example: Production units in multinational factories are standard cost centers. Discretionary spending centers are cost centers where production cannot be measured in financial terms. (Drury, 2005) Example: includes departments such as human resources, R&D, marketing – advertising, etc. A cost center indirectly adds to the company's revenue, for example money spent on R&D leads to innovative products, increasing sales and therefore profits. of the company.Performance evaluation: A cost center manager's performance is evaluated by a complex system of cost variances that compare actual performance to budgeted performance. (Please refer to Annex 1)3.2. Revenue Centers: A revenue center is a responsibility center where the manager is held responsible for the sale of finished goods produced by manufacturing departments or services offered through discretionary spending.